SB 623 - Under current law, when the state makes a local sales tax refund to a taxpayer, the state makes payment, which may include interest, to the taxpayer. Then the Director of the Department of Revenue deducts the amount of the payment from the local government's next local sales tax remittance. This act prohibits the Director of the Department of Revenue from withholding remittance of local sales tax revenues to recoup interest payments made due to a local sales tax refund and makes the payment of interest allowed in such a refund the exclusive liability of the state. Where a local sales tax refund would result in a reduction of the previous year's remittance period in excess of forty percent, the Director of the Department of Revenue may limit the deduction from the local sales tax remittance to not more than fifteen percent of the total amount of the local sales tax refund per remittance period to offset a local sales tax refund. If the director limits deductions from a local sales tax remittance, the refund may be made in installment payments in an amount equal to the deductions. Any person seeking a sales tax refund must provide the department with a plan to remit the refund to the individual or customer who actually paid the tax. If the plan is approved, the a refund will be issued. Material failure to follow the provisions of the plan will result in full repayment of the refund and the imposition of a penalty equal to three times the refunded amount.
This act is similar to Senate Bill 351 (2009).